I think what many punters may be overlooking here is CXOs strong cash position. Having so much cash means CXO is far more than an all or nothing play, and it gives cxo the luxury and leeway to have a poor drilling campaign or two...
Instead of having to shut up shop after coming up empty at Zola, our cash position has allowed us instead to analyse the results, gain a better understanding of the ground and pegs, and go for it with phase 2. Phase 2 comes up empty, probably do the same again and go for phase 3.
The same thing will happen with Ringwood. Management has said a few phases of drilling will be required to better understand Ringwood. We come up empty at phase 1 ringwood, we analyse the data, then go for it with phase 2, phase 3, phase 4...
If Zola and Ringwood prove to be barren, then BANG we move the rigs to Barrow Creek. BANG we move to Anningie. BANG we explore EL31279 or EL31271. Or if we get EL31144 granted, we explore that and hope that the spod at Sandras extends into our tenanent.
And if it so happens that cxo is the unluckiest explorer in the world, we have projects in other commodities (zinc, uranium, copper, silver, lead) that we can fall back on. Or, we may be able to acquire some other projects/land in relation to another hot and in demand commodity.
A poor drilling campaign does increase the risk of the stock for sure, and people will react as though it's the end of the world...but in CXOs case we will be far from down and out. As long as there's cash in the bank you are still in the game, and Cxo has plenty of cash to use on exploration. And the beauty of this game is, it only takes one discovery to change everything.
That's why I'm long on cxo. We have the means to aggressively drill and explore for some time...we are bound to hit something, surely...
Just gotta ride the bumps along the way.
If you are long on cxo, this month could be a good month to accumulate/average down. Could also be a good time of entry for those wanting to get on board.
All IMO.
GLTAH
A little story: I first bought into KDR about 4 years ago, a long time before they pursued their lithium. I bought in at 25c, watched it fall to 5c where it hovered for some time. But because KDR still had cash in the bank, I didn't sell out. In the end, and with quite a bit of luck, KDR now find themselves where they are, and by holding on I was able to make quite a bit of money.
You just never know in this game...as long as the drill bit is in the ground, you have a pulse.
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